Genesus Global Market Report: USA May 2023

My guess 400,000 sow liquidation
calendar icon 26 May 2023
clock icon 2 minute read

Many of my discussions with Jim Long revolve around markets. That is actually how we met when I answered an email. Always remaining respectful I have disagreed at times. Not lately. My only disagreement would be that he says we are going to lose 300,000 sows. I am guessing 400,000 sows or more. Many independent producers are tired and so are their barns. Staring at spending money to renovate barns for Prop 12, the current markets, and quite frankly the attitude is going to push liquidation. The issue right now is cull sow prices if you can get one is maybe 15 cents. Cull sow prices this year will be held in check as producers are waiting to exit the business. So where are we heading? Higher no doubt, but when?

I have a very good friend named Bob Lingenfelter. He, I and Jim have had some good discussions as Bob does a market analysis on the radio. Bob and I question the real pork cut-out price packers are getting. If you look at the numbers that are reported, it represents 10 percent of the total meat that gets sold daily. Cut-outs are so thinly traded no one enters the market using the CME as you might not get out of a position. Producers fought to get prices paid for hogs tied to cut out value. Now that most formula pricing has the pork cut-out as a percentage of the price determination, we are back to square one. What is the price of non-reported primal cuts? We are back to getting a price based off a very small amount of what is getting sold. Jim told me once how Spain determines prices weekly. I think he once sat in on the meetings. I will admit that at first, it went against my capitalist views but as Jim says, "it works for them".

Corn and bean planting in the U.S. should finish soon as we have about 2 weeks of dry weather. Then some rain to get this crop off to a good start.

Allan Bentley

Sales, Genesus Genetics
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